Cap and Trade Passes the House of Representatives
I bet a lot of you are pretty upset that Cap & Trade passed the House today. I'm not. The fact is, we need more clear and tangible examples of the blithering imbecility of Democrats. They are Economics Deniers. Unfortunately, it's not always this obvious. When they advocate for increased financial regulation, for instance, the results are more modest and less easily measurable. When Obama claims that he will "save or create" jobs, it's not easily falsafiable. The failure of the stimulus package is obscured by an unfortunate Keynesian consensus in Washington.
However, the looming failure of Cap & Trade will be obvious and immediate. The price of energy and, consequently, anything else you buy will increase. People will be thrown out of work. Any economic green shoots will wither. The catastrophic consequences will be undeniable, and provide an easily digestible lesson for all Americans. Economic fantasies, like the promise of "green collar" jobs, will be brutally put to rest.
The promises of a green technological revolution were never more than a product of political cynicism. If you can't convince enough Americans that Global Warming is a problem, invent an ancillary argument that is patently absurd, but sounds plausible to enough swing voters. That strategy appears to have worked, but it is inherently anti-democratic, and deserves to be defused. The only way to do that is to give the American people an object lesson in why these technocratic solutions don't actually work. The next few months will be very educational.
I see some potential flaws in my scorched-earth strategy. First, if we switch enough of our energy to nuclear power, as Steven Chu would have it, it may not matter that we've capped emissions. I doubt we'll see enough nuclear to make a difference, though.
The other weakness is that the results will be wildly misinterpreted. President Obama is pretty good as misdirection. What if we confuse the general price increase resulting from this pervasive new tax with actual inflation? We had this delusion in reverse during the 1990s and early 2000s. We saw a low CPI (resulting from increased efficiency that comes with global trade), and assumed that we weren't keeping interest rates too low, and borrowing too much money from the Chinese. We now know that we were borrowing and printing too much, but I don't know that the lesson about monetary policy really sunk in. Even among economists, there are few who are willing to acknowledge how slippery our measurements of inflation really are.
But, I'm still optimistic. This time next year, we could have entered a new dystopian future, reminiscent of Mad Max and setting the stage for either a big GOP win in the midterms, or a military coup in early 2011. Either way, that should shake things up in Washington.